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Medicare Links Doctors’ Pay to Practices

WASHINGTON, Dec. 11 — After years of trying to rein in the runaway cost of the Medicare program, Congress has decided to use a carrot instead of a stick to change doctors’ behavior.

Doctors had been fearing a pay cut under Medicare, the health care program for 43 million elderly and disabled, but Congress instead has offered doctors a small bonus with big strings attached. To get the money, doctors will have to report how often they provide quality care, as defined by the government.

Lawmakers approved the change as one of their final acts before adjourning early Saturday morning, and proponents said it would improve the quality of medical care.

But the plan immediately raised concerns among some doctors and lawmakers who specialize in health issues. They said they worried that it could be a step toward cookbook medicine and could erode the professional autonomy of doctors.

Now, doctors can qualify for a 1.5 percent bonus in the second half of 2007 if they report data on the quality of their care, using measures specified by the government. For example, doctors could be asked to report how often they prescribe a particular drug after a heart attack or how well they control blood pressure in patients with diabetes.

With these statistics, Medicare officials say, they will , in the near future, be able to reward doctors who follow clinical guidelines and perhaps penalize those who flout such standards without justification.

For several years, Medicare officials have advocated a pay-for-performance system, noting wide regional variations in the practices of hospitals and medical specialists. The idea was supported by the Bush administration and by Senators Charles E. Grassley, Republican of Iowa, the chairman of the Finance Committee, and Max Baucus, the Montana Democrat who will be chairman next year.

“Medicare now pays the same amount regardless of quality,” Mr. Grassley said. Indeed, he said, Medicare “rewards poor quality,” paying doctors to treat complications caused by their own mistakes.

But some influential Democrats, and even some administration officials and Republicans who support the general idea of pay-for-performance, expressed concern with federal agencies setting benchmarks for care.

“This is a very significant step,” Catherine G. Cohen, vice president of the American Academy of Ophthalmology, said Monday. “It’s the first time Medicare has ever paid individual doctors a differential for reporting quality measures. It could impose a significant new burden on doctors’ offices.”

The legislation has created strange bedfellows.

Some doctors, health policy experts and politicians, including liberals like Representative Henry A. Waxman and conservatives like Robert E. Moffit, director of health policy studies at the Heritage Foundation, are apprehensive. Beyond broader questions about whether the government can accurately measure the quality of care, they are concerned about the feasibility of developing standards for hundreds of thousands of doctors within six months. The quality reporting system begins on July 1.

In an interview, Mr. Waxman, a California Democrat who has been working on health policy for more than three decades, said: “I am very skeptical of pay-for-performance. I’m not sure we can measure quality and performance that well.”

Representative Pete Stark of California, who will become chairman of the Ways and Means Subcommittee on Health in January, said, “The entire concept of pay-for-performance is offensive.” Doctors, Mr. Stark said, are supposed to provide “quality care” and should not be paid extra for doing so.

Moreover, he said, federal officials “do not have the capability, the understanding, the knowledge or the training” to set standards for the quality of care.

Representative Charlie Norwood, Republican of Georgia, led efforts to enact a “patients’ bill of rights,” saying insurance companies should not tell doctors how to practice medicine. He objects just as much to government efforts to define quality.

“When government bureaucrats determine what good medicine is, instead of patients and doctors, I get very suspicious,” said Mr. Norwood, a dentist.

The administration says Medicare should not simply pay for more services, but should reward doctors for efficiency and high-quality care.

Representative Nancy L. Johnson, Republican of Connecticut, also championed the idea of pay-for-performance. But in an interview, Mrs. Johnson said she was disappointed that Congress had not gone further to ensure that doctors would develop the criteria for measuring quality. “Bureaucrats must never be allowed to dictate medical practice,” she said.

This concern is shared by some administration officials. In a recent speech to the American Medical Association, Dr. Scott Gottlieb, deputy commissioner of the Food and Drug Administration, said he worried about intrusions into the practice of medicine by federal agencies, including his own.

The original Medicare law, passed in 1965, said, “Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine.”

Mr. Moffit of the Heritage Foundation said the new initiative was “a backdoor attempt to repeal” this guarantee.

“It’s pay for compliance, not pay for performance,” Mr. Moffit said. “Doctors will be financially pressured to comply with government guidelines and standards. The integrity and independence of the medical profession could be compromised.”

Dr. Stephen C. Albrecht, a family doctor in Olympia, Wash., said Monday: “Medicare has a good idea here, but has not put much money behind it. The 1.5 percent bonus does not justify the extra effort required to do the quality reporting that the government wants.”

Some doctors, like anesthesiologists and thoracic surgeons, have been eager to develop their own quality measures.

Over the last 17 years, the Society of Thoracic Surgeons has collected demographic and clinical data on three million patients. Doctors say they have used the data to improve the quality of care.

Dr. Frederick L. Grover, president of the Society of Thoracic Surgeons, said, “We have provided feedback to doctors, comparing their performance with state and national benchmarks, and in this way we have significantly reduced mortality and complications.”

When possible, Medicare officials are supposed to use “quality measures” that have been endorsed by the private sector.

Despite the move toward pay-for-performance, Medicare payments to doctors are unlikely to keep pace with inflation. Congress postponed for one year a cut in fees but did not change the Medicare law’s formula for computing payments to doctors. They face an even bigger cut next year, in the range of 5 percent to 10 percent, ensuring that Congress will have to revisit the issue.

Representative Stark said, “Doctors and others who like pay-for-performance have to remember that it’s a zero-sum game.” As a result, he said, most doctors will have to accept lower fees if Medicare is to pay bonuses to the best performers.

Dr. Frank G. Opelka, a surgeon at the Louisiana State University School of Medicine in New Orleans, said: “We fully support the goal of enhancing the quality of care, but this is a new program. It will take some time to get broad acceptance by physicians.”

A version of this article appears in print on , on Page A27 of the New York edition with the headline: Medicare, in a Different Tack, Ties Doctor Pay to Performance. Order Reprints|Today's Paper|Subscribe